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Gold and Economic Decline

Monday, October 17, 2011, 10:03 AM

Reminiscent of the media's coverage of oil in the 2000-2008 period, gold has produced a multi-year stream of thoughtless op-eds and repetitive storytelling. If readers can recall how many times the bull market in oil was dubbed "over" leading up to the crisis of 2008, then gold has been in a "bubble" for at least as many years, if not longer.

The seminal piece to this genre was Willem Buiter's November 2009 Financial Times of London essay, Gold - A Six Thousand Year Bubble. That piece would be used as a template by other, lesser writers in the two years that followed. Consider this 2010 tracker-chart of opinion, emanating this time from New York: 

By 2011, one wondered if the large, national newspapers were capable of offering something more thoughtful on gold. This autumn, we were finally treated to an intelligent, non-derivative analysis, from an unlikely source: Paul Krugman of the New York Times.

Gold and Hotelling

Paul Krugman's partisan columns in the NYT have been a great disappointment to me in the years since he took the job. However, I encourage readers to read Krugman's earlier work. An easy entry to Krugman's theoretical view would be to simply watch the video of his 2008 Nobel Prize acceptance speech. His work on Trade was (and remains) brilliant. By contrast, his newspaper work as a columnist has been a constant source of frustration. Krugman has used his NYT column regularly in service to a political partisan cause, forgiving liberal figures for the same transgressions with which he has attacked conservative figures. Moreover, his advocacy of a generalized, untargeted Keynesian response to the ongoing economic crisis has become quite tedious.

But that is a subject I wish to handle in a future report. For today, I want to address Krugman's ability to blow past most of his peers when he chooses, freely addressing just about any issue that captures his attention. His recent posts on gold and economic decline offer a clarifying portrait of our current dilemma. Also, I suspect that fewer have paid attention to these partisan-free -- or as Krugman calls them, "wonkish" -- postings, and frankly, I'm grateful to have his valuable insights.

A source of constant disagreement with regards to gold's price behavior is whether the overall condition of inflation or deflation provides the most fertile ground for the yellow metal. By creatively using the work of Harold Hotelling, however, Krugman is able to tease out of gold's decade-long run -- and also its post-2008 run -- a rather different interpretation for gold's strength.

But first, a word on Hotelling. In an essay at The Oil Drum earlier this year, I addressed the implications that Harold Hotelling's views had for gold and the overall environment for investment in a post-credit-bubble world. The following is from my March 2011 post, Gold, Infinite Debt, and the Problem of Capital Storage: Has the Hotelling Moment Arrived?:

The migration of capital, between the world of natural resources and the world of finance, has been addressed by any number of thinkers, one of the more compelling being Harold Hotelling. Writing in the Journal of Political Economy in 1931, Hotelling proposed that a rational producer of resources would only be inclined to extract and sell that resource if the investment opportunities available with the capital proceeds were greater than simply leaving that resource to appreciate in the ground. So, given Hotelling’s theory of resource extraction, what has happened to gold production since the year 2000? Does the chart (the decline of gold production in the face of strong prices) reflect geological and cost limits to increasing gold production, even as the price rose from $250.00 to $1000.00 per ounce? Or, has there been some moderate yet gathering decision on the part of global gold producers to extract gold more slowly? After all, why extract gold to merely convert gold into paper currency, beyond the need to pay for the cost of production and provide, say, a dividend to shareholders? In other words, at the rate at which the price has been rising, why hurry to extract the gold?

In contrast to my take on Hotelling's theory, in which I consider the prospect of gold from a producer's point of view, Krugman's recent post looked at the price of gold from an investor's point of view. By doing so, I think Krugman is broadening Hotelling's theory, possibly beyond Hotelling's specific intent. But I don't mind. I think Krugman is spot-on in his analysis. In his terrific September 6, 2011 post, Treasuries, Tips and Gold, Krugman writes:

So what determines the price of gold at any given point in time? Hotelling models say that people are willing to hold onto an exhaustible resource because they are rewarded with a rising price. Abstracting from storage costs, this says that the real price must rise at a rate equal to the real rate of interest, so you get a price path that looks like this:

Krugman probes further, after considering the drop in real interest rates:

Now ask the question, "What has changed recently that should affect this equilibrium path?" The answer is obvious: There has been a dramatic plunge in real interest rates, as investors have come to perceive that the Lesser Depression will depress returns on investment for a long time to come... What effect should a lower real interest rate have on the Hotelling path? The answer is that it should get flatter. Investors need less price appreciation to have an incentive to hold gold.

But if the price path is going to be flatter while still leading to consumption of the existing stock — and no more — by the time it hits the choke price, it’s going to have to start from a higher initial level. So the change in the path should look like this:

















































For this is essentially a “real” story about gold, in which the price has risen because expected returns on other investments have fallen; it is not, repeat not, a story about inflation expectations. Not only are surging gold prices not a sign of severe inflation just around the corner, they’re actually the result of a persistently depressed economy stuck in a liquidity trap — an economy that basically faces the threat of Japanese-style deflation, not Weimar-style inflation.

While there may be a time when gold becomes protection against hyperinflation -- indeed, the nature of hyperinflation is ultimately behavioral, triggers quickly, and is hard to forecast, in my opinion -- I think Krugman is quite correct in pegging the outperformance of gold to the dearth of other investment opportunities. The present dearth of other investment options is illustrated by very low interest rates in nominal terms, negative interest rates in real terms, and a highly volatile environment, not only for equities but for most global currencies, thus rendering gold a least-worst investment option.

Krugman's view matches my own that gold is a winning investment in a period of economic -- nay, systemic -- decline. Contrary to the misguided view that gold is in a bubble, gold actually becomes, and is continuing to become, the more stable asset in an investment universe that has entered secular contraction. It is the deflating of the credit bubble and the instability this presents on a chronic basis to the financial system that have attracted capital to gold.

Gold, meanwhile, also has flaws. Primarily, it continues to travel and exist in a dollarized world. As we witness every so often, speculators and traders in gold often have to sell their gold positions as they retreat into their own respective currencies. Usually this is to cover other obligations, often denominated in US dollars. Until gold, not the US dollar, becomes the marker or the numeraire for transactions and trade, this oscillation in gold's price behavior will continue. That oscillation will be large enough, understandably, to make many observers conclude that gold is merely a speculative asset and (once again) nothing more than another bubble. As always, misunderstanding provides opportunity, and I marvel at how little commentary has been made on Krugman's lucid insight. He has clearly explained a very solid thesis for why gold will likely outperform -- and again, for free.

Betting on Decline

It is probably less the case, however, that Krugman and other Keynesians fully accept a resource-constrained model of the economy. Accordingly, I suspect Krugman, while currently frustrated with a political process that won't stimulate enough through government spending, does not foresee long-term decline for Western economies. I, however, do.

In contrast to the Keynesian view, I don't believe further stimulus programs will have anything other than a humanistic impact on Western economies, reducing the pains of adjustment. Pain reduction is not to be dismissed, just recognized. Equally, austerity programs suffer from the same analytical failure (or hope) because they, too, rest upon the idea that new resources -- energy, mainly -- can be brought forth cheaply enough to kick-start economic growth in the OECD. Also, austerity programs propose that the system can endure a liquidation phase and then recover. I'm not so sure. In fact, I doubt it very much.

Regardless of which model of decline we choose to employ, I think it makes sense just to mention a few here. There is Joseph Tainter's concept of diminishing returns to complexity, in which cultures and economies eventually have to devote so many resources just to maintain their elevated level of complexity that they enter decline. There is Frederick Soddy's concept of debt growth that outpaces the ability of the economy to repay it because it can no longer convert natural resources fast enough. I would also reference Jared Diamond's work on collapse, which probes history for real-world examples of systemic breakdown. And finally, there is the more mainstream work of Reinhart and Rogoff, which, using a comprehensive study of financial crises, suggests that the Western world is in for a long, tough slog.

That our current moment in the West maps so well to these models is fairly clear now to me, though this is still news to most. However, if one accepts these decline models, then the efficacy of gold is crystallized as a wager on further decline.

And that is the subject I take up in Part II: What to Expect for Gold in 2012, in which I update the chart of gold production over the past century, further explain my interpretation of Krugman's view, and suggest some ways to hedge or partly protect one's self during a time when a destabilizing transition has taken hold over the financial system.

Click here to access Part II of this report (free executive summary, enrollment required for full access).

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25 Comments

JAG's picture
JAG
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Hotelling's Theory and PO

Hotellings' theory is exactly why I have always thought PO to be a market phenomenon and nothing more. The slower the production, the more money Big Oil makes. 

Or think of it this way: The more people that are convinced that Peak Oil is a legitimate concern, the more money Big Oil makes from us. 

Peak Gold marketing is just more of the same, IMO.

plato1965's picture
plato1965
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 correction ?  The more

correction ?

The more **oil exporters** that are convinced that Peak Oil is a legitimate concern, ... yadda yadda yadda..

but.. if it ain't true.. you can have a defector...  who merrily pumps away while others foolishly hoard.

Persuading the general public that peak oil is upon us.. is the last thing big oil needs.. it encourages moves away from reliance.

Think in terms of pusher and addict.

plato1965's picture
plato1965
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 Just like to add I'm a

Just like to add I'm a huge fan of Gregor, and anyone else who groks Peak Oil, Soddy, T.S.Eliot and Gormley..

http://www.theoildrum.com/node/6705

 We are the hollow economists,
headpieces stuffed with wire mesh... alas!

 
between the credit and the collateral,
between the sustainable and the present...
falls the shadow.

one day in a future piece, I hope Gregor finds a use for...

http://www.guardian.co.uk/artanddesign/2010/aug/27/antony-gormley-exposure-sculpture

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Barney Rouble
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More reading on Krugman & gold

Hi Chris,

If you have the time or inclination, this series of articles re Krugman's recent Gold analsis may be of some interest (or not!)

http://pogoprinciple.wordpress.com/ 

Regards,
 

Barney

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Producers sandbagging? I think not.

O.K. so real interest rates are effectively zero.  That makes the curve pretty much horizontal, meaning the price must increase to the choke level, now.  So now where's the incentive to hold onto the reserves.  The current price is the best price you can hope to get (ever). Production will naturally increase to the highest levels possible.  And that's what is currently being done by the producers today.  The fact that production levels are slowing has nothing to do with producers not wanting to produce.  Gold sources are scarce and thin and dwindling.

KugsCheese's picture
KugsCheese
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Banking Part 2

In the banks go into crisis again, it will be a bigger problem and my guess is deflation will hit.   But once things settle (how long will that take?  Depends on government policy) the dark pools of money could ignite a fierce inflation.  The world seems to be setting itself up for more unpredictable inflection points due to governments interrupting free markets more so than usual.   I just cannot see a pleasant way out of this historic credit bubble mess.   Walking on a High Wire.

photocurio's picture
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JAG wrote: Hotellings'

JAG wrote:

Hotellings' theory is exactly why I have always thought PO to be a market phenomenon and nothing more. The slower the production, the more money Big Oil makes. 

Or think of it this way: The more people that are convinced that Peak Oil is a legitimate concern, the more money Big Oil makes from us. 

Peak Gold marketing is just more of the same, IMO.

If the underground supply of oil is expanding, i.e. more discoveries are being made, then delaying production will not pay.  That is because the price tends to fall, not rise.  The delayed production strategy only works if there is shrinking capacity.  A producer can't cause Peak Oil by withholding production, but might respond to Peak Oil that way.  

Peak Oil is a geological phenomenon. But it may be exacerbated by market forces.

KugsCheese's picture
KugsCheese
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JAG wrote: Hotellings'

JAG wrote:

Hotellings' theory is exactly why I have always thought PO to be a market phenomenon and nothing more. The slower the production, the more money Big Oil makes. 

Or think of it this way: The more people that are convinced that Peak Oil is a legitimate concern, the more money Big Oil makes from us. 

Peak Gold marketing is just more of the same, IMO.

Is oil worth more in the ground?  Oil runs the world economy unlike gold.   So as new tech is developed that can mine oil, producers will mine it as prices become attractive to make the effort and profit.  There is no conspiracy beyond the usual market shenanigans by traders.

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Gregor Macdonald
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Hotelling Tipping Points

Delighted to see so many insightful comments on this piece. There are many valid points one can make with regards to both oil, and gold, production by using Hotelling's views. This remark by photocurio was particularly spot on: " A producer can't cause Peak Oil by withholding production, but might respond to Peak Oil that way. " I think that is right. In some of my other research into oil, over the years, I have identified a tipping point early last decade when many marginal producers such as Nigeria became aware that their own smaller supply was suddenly crucial to the oil price. This would never have been the case until actual, real, spare capacity went into decline.

This is not to say that Hotelling's views can be used reliably in all cases.Indeed, Hotelling relies on that old uncertainty: rational actors.  But, I do think Hotelling's views are very helpful.

G

plato1965's picture
plato1965
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 hotelling assumes a

hotelling assumes a rational player.. with time on his side..

Let's assume we're sitting in the Saudi Arabian seat of  no-limit oil poker..

We keep our cards (reserves) close to our chest.. we hide our aces..

we feign weakness when strong. Strength when weak..

but we can't apply pure hotelling strategies.. because.. our life is finite.. politically, individually, and at any moment there may be a breakthrough that renders our carefully guarded reserves redundant.. as Keynes put it.. in the long run, we're all dead.

So the future is both hazy.. and heavily discounted.. especially with a growing and restless population...

With regard to  hotelling theory.. gold appears to be the absolute worst commodity to apply producer game theory to, certainly in the hotelling sense..

Every miner / new producer is competing with the entire history of previous producers.. all hoarded and available at a price..

cash4gold is mining the gullibility ores, but (high and expected to decline) prices will fetch older and smart-speculative reserves onto the market.. every gold holder is a "producer" in a sense.

aside: reserve currency hotelling.. ah now there's a juicy topic !! 

You know the day destroys the night
Night divides the day
Tried to run
Tried to hide
Break on through to the other side
Break on through to the other side
Break on through to the other side, yeah
We chased our pleasures here
Dug our treasures there
But can you still recall
The time we cried
Break on through to the other side
Break on through to the other side
....

JAG's picture
JAG
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Peak Cigarettes

Gregor Macdonald wrote:

This remark by photocurio was particularly spot on: " A producer can't cause Peak Oil by withholding production, but might respond to Peak Oil that way. " 

Greetings Gregor,

First, thanks for submiting the thought-provoking article. I have some questions regarding the statement quoted above, but I want to approach the topic from a different angle.

Let's imagine that we are a community of cigarette smokers that live on an isolated island. Two of the community members, Joe and Frank,  each have a stash of cigarettes that they can use to trade with the other community members. No one on the island but Joe and Frank know how many cigarettes that they each have stashed away.

  • How long do you think it takes Joe and Frank to realize that they can trade their cigarettes for more in the community if they foster the perception that their cigarette stashes are dwindling?
  • And since the last man with cigarettes on an island of smokers has virtually unlimited power, doesn't this naturally result in a competive hoarding of cigarettes by Joe and Frank?
  • How much more is this exploitation exasperated by the introduction of a middle man, Mr. Sachs, to the cigarette trade?

My point being: If I'm a smoker on this island, I would have to conclude that cigarettes were in short supply ("Peak Cigarettes?") long before the actual supply ran out. My best option to avoid this market "manipulation" would be to take the pain and stop smoking, which is why I'm taking measures to minimize my personal dependence on oil, even if I don't buy the PO argument. 

All the best....Jeff

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JAG wrote: Gregor Macdonald

JAG wrote:

Gregor Macdonald wrote:

This remark by photocurio was particularly spot on: " A producer can't cause Peak Oil by withholding production, but might respond to Peak Oil that way. " 

Greetings Gregor,

First, thanks for submiting the thought-provoking article. I have some questions regarding the statement quoted above, but I want to approach the topic from a different angle.

Let's imagine that we are a community of cigarette smokers that live on an isolated island. Two of the community members, Joe and Frank,  each have a stash of cigarettes that they can use to trade with the other community members. No one on the island but Joe and Frank know how many cigarettes that they each have stashed away.

  • How long do you think it takes Joe and Frank to realize that they can trade their cigarettes for more in the community if they foster the perception that their cigarette stashes are dwindling?
  • And since the last man with cigarettes on an island of smokers has virtually unlimited power, doesn't this naturally result in a competive hoarding of cigarettes by Joe and Frank?
  • How much more is this exploitation exasperated by the introduction of a middle man, Mr. Sachs, to the cigarette trade?

My point being: If I'm a smoker on this island, I would have to conclude that cigarettes were in short supply ("Peak Cigarettes?") long before the actual supply ran out. My best option to avoid this market "manipulation" would be to take the pain and stop smoking, which is why I'm taking measures to minimize my personal dependence on oil, even if I don't buy the PO argument. 

All the best....Jeff

Bullet #1:  a short-term play.

Bullet #2: what is the use of the Cigarettes?

Bullet #3: people stop smoking Cigarettes.

But to the point of how price changes and who can manipulate it regarding oil.   If the price goes up, why is it going up?  Tulips in Europe or a core asset dwindling?   I will take the most likely case of dwindling core asset: oil producers know how to dig for oil, it is all they do.  As oil stock decreases, they continue to dig. The digging shows oil is dwindling.   As oil dwindles and demand increase, price rises.   At this point who is manipulating?   The producer has much more cost to dig it and the user is paying more.  So the question is: what is the marginal cost to produce an additional barrel of oil?   In the case of oil, that cost is a concern for producers.   How would you like to be in business where supply is tried but demand in increasing?  You do the math and say "guys if we all put X dollars, we can get that oil and sell it at Y."  Then it turns out it didn't cost X (it cost X + 20%) but you can only sell at Y (then a year later it sells at Y+ 40%!)?    It is a very risky market.  

So we need to build modern nuke plants at true cost, build a smart electrical grid, convert to plug-in hybrid cars.   But what are we doing?  Nothing.

Why are we doing nothing?  Because regualtions make it not possible to build modern nuke plants at true cost, the electricity market is a monopoly so infrastructure is decaying, the car companies get big hand-outs from governemnts so the fight is not there to innovate (all current car tech can be traced to circa 1900).

KugsCheese's picture
KugsCheese
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Gregor Macdonald

Gregor Macdonald wrote:

Delighted to see so many insightful comments on this piece. There are many valid points one can make with regards to both oil, and gold, production by using Hotelling's views. This remark by photocurio was particularly spot on: " A producer can't cause Peak Oil by withholding production, but might respond to Peak Oil that way. " I think that is right. In some of my other research into oil, over the years, I have identified a tipping point early last decade when many marginal producers such as Nigeria became aware that their own smaller supply was suddenly crucial to the oil price. This would never have been the case until actual, real, spare capacity went into decline.

This is not to say that Hotelling's views can be used reliably in all cases.Indeed, Hotelling relies on that old uncertainty: rational actors.  But, I do think Hotelling's views are very helpful.

G

IIRC Shell moved into Nigeria and shortly later insurgents murdered a material number of the Shell employees.   So it isn't so simple.   When a core asset dwindles persons fight for it in many ways.

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KugsCheese wrote: Why are we

KugsCheese wrote:

Why are we doing nothing?  Because regualtions make it not possible to build modern nuke plants at true cost, the electricity market is a monopoly so infrastructure is decaying, the car companies get big hand-outs from governemnts so the fight is not there to innovate (all current car tech can be traced to circa 1900).

Kugs, I'm not sure about that last statement.

1.  What government handouts?  If you're talking about the loans from a couple of years ago, those were not bailouts like the banks received.  They were loans.  GM has repaid, Chrysler may end up being a bad loan.

2.  Government is not the reason for lack of auto innovation.  Henry Ford's original was designed to run on peanuts, literally.  It was a bio-diesel engine.  It was the oil companies who coerced the current setup, otherwise we may all be driving grease cars.

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interesting analogy

Jag, especially since there is quite an addiction inherent in both oil and cigarettes.

Since you are making points by asking questions, I have some for you.

  • Since the islanders are addicted and outnumber the 2 guys with the cigs, wouldn't a more predictably human response be to take them by force? Or at a minimum, force a counting of the stash? Both are being done in the real world as it pertains to oil.
  • There obvilously is a fixed amount of both cigs (in your example) and oil, but the former amount is knowable. Is there any reserve estimate for oil that you would accept? If not, then how could you possibly know we are not at PO? If yes, then I am prepared to do the math for you and present you with an ironclad case that PO is here, past, or in the near future.
  • How many people, companies, countries must be involved in the PO cover story, and are all working in perfect concert to pull less oil out of the ground in thier respective countries every year? Or are the extraction rates also part of the Goldman Sachs master plan and being manipulated?

As these countries pull less oil out each year, that production must be made up from somewhere. I think you are saying this is a decision being made by the market makers, which countries profit and which countries die on the vine, and has nothing to do with geology. Where do these market makers and speculators get such power to kill a nation without a shot being fired?

  • In terms of compettitive hoarding, in the example of the island, this would backfire becuase the people would either take by force or quit smoking. In the case of oil, there are far more than 2 guys willing to sell, and so many of the sellers base their entire economic health and balancing of bugets / trade on the export and sale of oil. They have every incentive to pump every possibile barrel. How does Mr. Sachs influence these countries to stop producing oil and go into economic tailspins?

I have many more questions, but I'm confident you have heard them all before so I'll stop here.

Cheers,

R

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Ready

The analogy between oil and cigarettes also breaks down because you can break a cigarette habit by walking away with no ramifications aside from brief non-severe withdrawal symptoms.  Been there, done that.  The price got too high, $1.00/pack.  The same cannot be said for oil addiction.

Doug

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Ready wrote: Is there any

Ready wrote:

Is there any reserve estimate for oil that you would accept? 

Ahh, once again Mr. Ready gets to the crux of my argument.

There is no reserve estimate that I would accept, because common sense suggests that this data is unknowable, at least by us mere mortals. 

It's not a conspiracy, it's just human nature (as my oversimplified analogy was suggesting).

Hope you are getting back on your feet....Jeff

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Argh.. forgot about OPEC

"How many people, companies, countries must be involved in the PO cover story, and are all working in perfect concert to pull less oil out of the ground in their respective countries every year?"

  http://www.opec.org/opec_web/en/about_us/23.htm

Cancel my poker game analogy.. at least while OPEC exists...

 http://www.ft.com/cms/s/0/49bcef78-d6d4-11df-98a9-00144feabdc0.html

As of November 2010, OPEC members collectively hold 79% of world crude oil reserves and 44% of the world’s crude oil production, affording them considerable control over the global market. - source http://en.wikipedia.org/wiki/OPEC

So perhaps OPEC as a whole are persuing a hotelling strategy in deciding where to set quotas..

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End result it the same

Jag,

Since the end result is the same, and you are making choices based on the threat of less or more expensive oil, I guess it really dosn't matter why. I really don't think your why is the right one, but I could be wrong, so I am glad at least our actions are in unison if not our reasoning.

Poet, I was referring to the non-OPEC countries in decline in my previous statements. If you want to look closer at OPEC, lets start by counting the number of US and NATO bases in the region. It seems clear to me that the power to do whatever they want with their resources is questionable at best.

Cheers,
R

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Chinese buying

http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2011/10/21_London_Trader_-_Sovereign_Silver_Buying,_Middle-East_Shortages.html

Quote:

On the heels of KWN reporting the Chinese buying massive amounts of gold yesterday, King World News has now interviewed the “London Trader” to get his take on the situation in silver. The source stated, “The price of silver has no reality to the paper market at all, absolutely zero reality there anymore. There is extraordinarily tight supply right now in Asia. When you order silver there is so little available at these prices, that’s the trouble. You can order it all day long, but you are going to have to wait for it.”

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wrong name

Ready wrote:

Poet, I was referring to the ...

Sorry, I meant Plato.

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 I'm honoured to be

I'm honoured to be mistaken for Poet.. :-)

"Plato, I was referring to the non-OPEC countries in decline in my previous statements. If you want to look closer at OPEC, lets start by counting the number of US and NATO bases in the region. It seems clear to me that the power to do whatever they want with their resources is questionable at best."

Agreed.. there's the petrodollar issue, as well as geopolitics not to mention internal pressures..  

If non-OPEC supply is peaking, that would shift control in OPEC's favour.. perhaps accounting for the phase-change in oil price dynamics over the last decade.. ?

Looking at OPEC's statement about pricing last year, the oil price has essentially behaved exactly as they wished.. rising to around $100 bbl..

If only central banks had the same accuracy ... !

Speaking of which, and getting back to the yellow gold rather than the black version..

The analogue to OPEC in the gold world would be the central banks.. and they rather than the miners have the power to increase "production" since previously mined gold is identical to the freshly mined stuff..

http://en.wikipedia.org/wiki/Washington_Agreement_on_Gold

Understanding that thing is a whole n'other can of worms..

Why do central banks hold gold ? - "it's tradition" - BB

Why do they sell or buy it ?

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Curiouser and curiouser...

 But why do we have such a non-transparent, manipulated, covert system?  Why don’t we have something that’s more normal.... - Jim Rickards

Indeed..

http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2011/10/21_Jim_Rickards_-_Western_Gold_Policy_Threat_to_National_Security.html

 http://www.theregister.co.uk/2010/03/05/negative_strangeness/

hmm..  charming but irrelevant.. keep looking.

Strangely enough, there was a gold article yesterday that fits "exposure"...

gormley - exposure

http://www.belfasttelegraph.co.uk/news/local-national/northern-ireland/man-who-tried-to-turn-his-faeces-into-gold-is-jailed-16066385.html

Poet's picture
Poet
Status: Diamond Member (Offline)
Joined: Jan 21 2009
Posts: 1836
Ready, It Wasn't Me. - Poet

Ready

I don't know who you are talkng to. This is my first post in this thread. :)

Edit: Oh, I got it now. Thanks for clarifying that you meant Plato1965.

Plato,

Thank you for the kind compliment! :)

Poet

Ready wrote:

Poet, I was referring to the non-OPEC countries in decline in my previous statements. If you want to look closer at OPEC, lets start by counting the number of US and NATO bases in the region. It seems clear to me that the power to do whatever they want with their resources is questionable at best.

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